CHAPTER I

INTRODUCTION

!ntroJucf 1m1 1

The industrial revolution in Britain, which was contemporaneous with

discovery of steam power, put an end to the traditional era. As a consequence, it

brought about a revolution in transportation system. Development of transportation

system enabled Britain to obtain cheap raw materials for making various products on

the one had and provided a large market for its massive industrial products on the other

hand. The most important set of advantages which Britain and other pioneer countries

possessed in the process of industrialization were availability of cheap labour, raw

materials and existence of vast market demand for their industrial products.

Modem technology associate-d--with cheap inputs paved the way for these

!

countries to pass successful}'y trough. the process of industrialization and economic I

development rapidly. Of cou~e,.,tne~ achievements were aided by external trade with Lvl-<..{1 '"~,

overseas countries (the Third World countries) .Thef"imported raw materials and ./

\

labour fromdhese/overseas countries and exported manufactured goods to them. In \___},

other words, it resulted in an international division of labour. However, whereas the

level of living of industrialized countries improved the level of living of the Third

World countries remained at a low level. Many of these countries were colonies of

developed countries and, therefore, depended on those countries from the point of view

of political system.

After two world wars and political independence of majority of the colonial

countries, they were interested in improving the level of living of their people.

Naturally, their approach focused on the experience of developed countries in which

Introduction 2

industrialisation had served as a gateway for achieving economic success.

In this chapter after discussing the concept of industrialization and different views

regarding criteria by which one can distinguish industrialised countries from the

unindustrialized ones. We shall look trough the significant role played by

industrialization in the process of economic development. In addition, major factors

influencing the pace of industrialization shall be pointed out. Therefore, objectives,

hypotheses, methodology, data base and scheme of the thesis shall be outlined.

---------1.1. The Concept of Industrialization /C\. . .

Industrialization is the process by which an:~derd~velope~ country becomes ...2--- ·-··~

an industrialised one1• Following are essential characteristics of an unambiguous

industrialization process. First, the proportion of the national (or territorial) income

derived from manufacturing industry and other secondary activities in general, goes up,

except perhaps for cyclical interruptions. Secondly, the proportion of the working

population engaged in manufacturing and secondary industry in general also shows a

rising trend. While these two ratios are increasing, the income per head of the

population also goes up, except again for temporary interruptions (Datta, 1952;

Kuznets, 1966; Sutcliff, 1971 f. Although, there is not complete unanimity regarding

the criteria to be adopted. In order to separate industrialised counties from

unindustrialized ones, economists mostly highlight increase in the share of industrial

1 R. B. Sutcliff, !ndustr:y and 'Jnderdevelopment, London, Addison Wesley, 1971. 2 John Eatwell and others, A Dictionary ofEconomics, Vo12, THe New Palgrive, 1987.

Introduction 3

sector in general, and that of manufacturing subsector in particular, in national income

and total employment. As already pointed out, this tendency is associated with an

increase in per capita income. For example, "Hughes says an industrialised economy is

one where the share of manufacturing in commodity production is above 65.0 percent.

However, the application of this criterion to data from mid- 1970s in Hughes ( 1980)

gives counter-intuitive results, with USSR and Canada not passing the test of

industrialisation and Brazil and Argentina appearing industrialised". 3

According to Kuznets' view ( 1969) a country's or region's industrialisation is

defined as a sustained rise in the share of total product originating or of total labour

force and material capital employed in industry. 4

R. B. Sutcliff (1971) has presented a wider set of criteria to distinguish

industrialised countries from unindustrialized ones. In his view, three components are

necessary in order for a country to be regarded as industrialised, namely, a certain

minimum percentage (say 25%) of its gross Domestic product (or some other measure,

of production) should originate in the industrial sector. Furthennore, a certain

proportion of output ( 60%) of industrial sector should be in manufacturing. A certain

3 John Weiss, Industry in Developing Countries: Policy and Evidence, London, Croom Helm,p.20, 1988.

4 Simon Kuznnts, Economic Growth and Structure, Indian Edition, I %9, p. 194

Introduction 4

proportion of the population, say 10%, should be employed in industrial sector. 5

Industrialisation brings about drastic structural changes in an economy. It brings about

migration of labour from agricultural sector towards industry . These labours must be

trained to become eligible for working in factories. On the other hand, this migration

changes geographic distribution of population so that the share of urban areas out of

total population goes up. In addition, enterprises have to pay higher wages for the,

firstly, for motivating agricultural workers to leave their villages, and secondly, to

enable them to cover their expenditure in cities. Change in the structure of national

production and employment in favour of industry, and diversification of exports, may

be counted as other effects of industrialisation on the economy.

1.2. Why Industrialisation is Important ? Industrialization is of prime importance smce it brings about increasing

productivity in industry and in other sectors through irmovation, technological progress

and improvement in managerial methods. Consequently, it leads to an increase in

national income.

Further, broadly classified, it may be argued that there are two strategies for achieving

economic development; the first one ts economic development through I industrialisation of an economy, or the strategy of industry- reliance. According to it,

industrialisation plays a key role in this strategy. In the second one, economic

5 R.B.Sutcliff, Industry and Underdeveloped Countries, p.1971. pp.16-17.

?

Introduction 5

development through reliance on agriculture is stressed. It may, however, be noticed

that agricultural development in tum depends substantially on industrial development.

Some reasons for this may be outlined as follows:

i) Population growth is high in the Third World countries. It is more than ~0 per

ii)

iii)

i- '\ \. , ....... ~

(!'' . cent m some cases. This growth of population would lead to increase in -----demand for foodgrains and non-foodgrains as well. On the other hand, income

elasticity of demand for foodgrains is high. This arises on account of the fact

that the people of the countries spend a very high percentage of their income to

purchase food items on account of low per capita income. It is worth noting that

r arable lands are limited and are not enough to produce foodstuffs to match

increase in demand for them. Therefore, there is no alternative except to

mechanize their agricultural sector or to import foodgrains from abroad.

Importing foodgrains is not possible in long-term because most of the countries

face a deficit on their external account payments. Moreover, they are interested

in following a strategy of self-sufficie~i~ main agricultural products. I

Most of agricultural products decay rapidly. Therefore, they must be converted

to manufactured goods in order to preserve them for a long{nod.

Income elasticity of demand for agricultural commodities is low in the global

market. As a consequence, the terms of trade of external trade have been

continuously changing against the Third World countries whose most

exportable items are a~:,'licultural goods. Consequently, their export earnings got

lmroduction 6

reduced and their external accounts have generally faced a deficit till now On

the other hand, industry is able to produce a large variety of goods using an

agricultural product. For example, industry makes many industrial goods from

some types of cereals, vegetables, etc., which there have enough demand for

them abroad, and create more value added than primary products.

It must be kept in mind that industrial development and agricultural

development are not incompatible. They supplement each other and there is no

conflict between them. For instance, agriculture provides required foreign /

exchange for industrial investments and so industries are highly dependent

upon agricultural exchange earnings in developing countries. Moreover, the

latter sector has the highest share in total employment of these countries. In

addition to these, agricultural sector is the source of foodgrains to meet food

needs of their people. Therefore, policy-makers have to pay attention to vital

role of agricultural sector in the process of industrialisation as a sector which

provides raw materials for industry and absorbs many of its products.

Otherwise, the process of industrial development may run into a number of

problems.

1.3. Effective Factors in the Process of Industrialisation Broadly classified, there are two groups of factors which play a key role in the

process of industrialisation, namely, economic factors and non-economic factors,

among which political factors play a dominant role. Economic factors include physical

Introduction 7

capital, natural resources, skilled manpower, technoiOh'J', management, size of market

and infrastructural facilities.

Physical capital has a pivotal role in industrialisation in each country since ----shortage of capital is perhaps the most important obstacle to industrialisation in the

Third World countries. The experience of industrialised countries also confinns

importance of capital in the process of industrialisation. "According to one estimate

gross domestic investment as a proportion of Gross Domestic Product (GOP) in Great

Britain increased from around 4.0 percent in 1700 to 5.7 percent in 1760,7.6% in 1801

and 11.7% in 1831 ". 6 The rate of investment in the industrialisation phase of Germany,

Sweden or Denmark reached 15% or more of GOP after 1860. The Export of Capital

from Europe aided considerably U.S.A.'s industrialisation process until she became a

creditor nation around the turn of 19th Century. 7

Natural resources also have an important role in the process of industrialisation.

In fact, these provide the required raw materials by which industries can develop in a

country. Despite this, natural resources are not always necessary for industrialisation of

a country. It can be seen from the case of certain non-industrialized countries with rich

natural resources such as the members of the Organization of Petroleum Exporter

Countries (OPEC) and some industrialized countries which are not rich in natural

~ 6 John Eat well and others, A Dictionary of Economics, voL2. The New Palgrive, 19!Y

7 Ibid.

Introduction 8

resources, like Japan, South Korea, etc. Moreover, improvement of technology has

reduced the importance of natural resources from the point of view of industrializatiOn.

Although technological advancement has tended towards capital-intensive

technology in recent decades, but skilled manpower and management have retained

their key role in the process of industrialisation. In fact lack of these factors has

emerged as a very serious obstacle in the process of industrial development in the Third

World countries.

Limitation of market is also a important obstacle in the process of

industrialisation, particularly in case of small countries. They are faced with high tariff

walls and many other impediments like stiff competition from industrialised countries

m their drive to export their industrial products. Therefore, size of market Is a

determinantal factor regarding industrialization of the Third World countries .

. Finally, availability of i~f~tructural facilities is a crucial factor which can

attract investors to a country or a region within a country. These facilities pave the way .

for industrialization of a country on account of the tremendous external economies

which they generate.

Let us now turn to political factors which are no less important than economic

factors. The experience of many industrialized and unindustrialized countries

substantiates the truth of this assertion. Countries like Japan, South Korea and China

among industrialized and newly industrialized countries and Chile, Pakistan, most of

Middle East and African countries among the unindustrialized ones stand witness to

Introduction 9

the importance of non-economic factors in the process of industrialization.

Political stability is a very important factor because private investment is very ---- ---- ·-... . ~--

sensitive to political instability. The role of the state should also be borne in mind. The

state can lead, or mislead, a country on the path of industrialisation through

undertaking appropriate or inappropriate polices. For example, it is claimed by one

school of thought that import substitution policy postponed ~D~Q~_Ij_~tion .ll!l~~

economic de_y~Jqpm_ent. jn somt:! of the coun~ries which adopted this approach. --- ,.,.,

It has been claimed that technological progress has reduced the importance of

role of natural resources in the process of industrialization of the countries whereas the

place of political factors has got enhanced. According to K.Grunwald and JO.Ronall

( 1960) "Technological Progress has stressed the importance of political factors. New

sources of raw materials and energy have disproved the theory which considered

countries unsuitable for industrialization on account of their natural cost-disadvantage.

The concept of absolute industrial unsuitability of a given country has given way to

consideration of the pace of industrial development". 8

1.4. The Objectives of the Research In the background of the preceding introductory discussion, the main objectives

of the present study may be stated as follows:

1) Investigation of the process of industrialization of Iran at national level over

N Grunwald Kent and O.Ronall Joachim; Industrialization and the Middle East. Council for

Middle Eastern Affairs Press, 1960.

flllroJuclion 10

the period 1900-1993 and detennining the place which the country is

occupying from this point of view.

2) Looking into and evaluating main industrial policies, which have been

undertaken by the state, during the period under economic development plans.

3) Survey of levels of regional development in the process of industrialis~ion

during the period of I 971-91; whether industrialization occurred equally among

the regions or not; if not, what was the direction?

4) To examine the situation in respect of rural-urban disparities during 1971-1991

phase of industrialization of the country.

5) Looking at regional and rural-urban policies, which have been undertaken by

the state, during the plans.

6) Study of relationship between industrialization and urbani1..ation in Iran over

the period 1971-1991.

1. 5. Hrpotheses This research work will seek to inquire into the situation regarding rural-urban

and interprovincial (regional) inequalities in Iran in the process of industrialization. In -:----·---- -·~··

addition to these, study of relationship between industrialization .of the country and

growth of urbanization is also designed as an objective of the research. Therefore, the

hypotheses of this research can be outlined as follows:

i). One can hypothesize that rural-urban inequalities are to have decreased in

the post-revolution period. There are a number of grounds for postulating this

lntroducl ion 11

hypothesis. For example, the policy of self-sutliciency in essential agricultural

f products and self-reliance in other agricultural products has been followed

.-~, during state post-revolution period. For achieving this objective, ~~raJ _

_/(,I\ . \{ I

~t. \1 . \' . \ ~ ~ ·. G _.l''·. , • > · ) development has been assigned a pivotal place in the state policy.

,, . - 'v Establishment of Jihad-e Sazdndegy (construction crusade) was an attempt to

promote rural development. Its activities focus on seven fields: agriculture and

cattle breeding, water and electricity supply, development of handicraft

industries, excavation of mines and construction of roads. The organization was

later elevated to the rank of a Ministry. As a consequence, the rural areas have

attained remarkable improvements with respect to level of living of their

I residents. To take an illustration, some 8_5.Q per cent of Iranians living in-the

rural areas have been provided with electricity and about 80.0 per cent with ·-·~ ............... , ... --

l potable water during the post Islamic Revolution period whereas these ,-~·- .- ·-- ---·

percentages were 24% and 14% respectively in the pre-revolution period, i.e;

prior to 1976. Moreover, 21,000 km. out of 35,000 km. 9l}s_~r9ads in the rural

areas have been asphalted during the same post-revolution period.

ii) Divergence of interprovincial disparities and their convergence in the post-

revolution period are phenomena which have taken place in the process of

industrialization in Iran . Keeping in view the fact that industrialization

primarily takes place in those regions which have external economies, it would

lead to accentuation of regional divergence. This is due to the fact that labour

Introduction 12

and capital mo~e towards industrialised regions. On the other hand, there is

considerable differentiation among the provinces from the point of vie\v of

natural resource distribution, demography and availability of infrastructural

facilities. Hence, one can say that interprovincial disparities may get widened

with the rising momentum of industrialization process in the country.

Historically, it may be attributed to the period of post-land reforms which

accelerated with the pace of industrialization in the country.

An attempt is now made to design the perspective of the problem

-~during the post-revolution period. There is some evidence which perhaps

"' ,.~· o:-"' substantiates changing the decisions of policy-makers in favour of

-~ -..::~

.......... p

7' -!1 \'"

underdeveloped regions during the post-revolution period such as establishment ....... --··- -T ' _,., & ~ - • ..,.,. .. ~

of a few foundations like housing foundation, the office of deprived regions,

etc. In addition, the constitution of the country has emphasized provision of

social justice. For approaching this purpose, the economy of the country has

... - ,__ -~- ~~ """'

been divided into three sectors: ~~~~e ~:~tor:l\gover:lm_:_~~!.~t~r)and co-

/ o~rative sector.-'It should be noted that the main purpose of the latter has been 1

provision of s~ial justice. As a consequence, industrialization activities- have J) ,_,__._._-- ..... -· -- r

/

tended to get spread across the country in the post-revolution period.

iii) Industrial growth has played an insignificant role regarding urbanisation,

particularly in post revolution period in Iran. This arises form the fact that the

urban population of Iran was 58.2 per cent in _1995, whereas, it had been 48.0

lntroductum lJ

per cent in 1977, i.e. it went up 10.2 per cent in the post-revolution period

( 1979-95). On the other hand, during the same period, industrialization hardly

underwent a note\\-·orthy increase in terms of industrial indicators, particularly

prior to implementation of the First Five-Year plan. lienee, it can be surmised

that other factors are primarily responsible for urbanization such as existence of .... . . . . ~ ~~ ...... _.~ . ._.....-- -

inequality between rural ~nd !lfban 3£~ i_I!_!C!m.S of living cond~ti~_!!~ •. meagre

income in rural areas and inability of agricultural sector to absorbing all new

comers to labour market in the rural areas. Of course, break do\\n of traditional

social order is an inevitable concomitant of modern urbanisation. Subsequently,

many rural residents left their home in order to obtain a better living in cities.

iv). Finally one can enquire whether the flow of rural-urban migration in Iran conforms

to the Todaro hypothesis. ,....-----Based on Todaro's view, migration from rural areas to urban areas can be taken

// to depend upon two factors. The first factor is difference'1n incomes between rural and

urban areas and the second one is the probability of obtaining a n~job in the formal

sector. In other words, migration from rural areas to urban areas depends on expected

income gains of a new migrant to urban areas. Expected income is defined as

difference in real incomes between rural and urban work multiplying by the probability

Introduction 14

of a new mi!:,rrant obtaining an urban job'J

Therefore, mi!:,rration is affected by differences in expected rather than actual earnings

which had been pointed out by Arthur Lewis ( 1954 ).

According to Todaro, it is even possible that much difference in incomes

between rural and urban areas cannot encourage rural residents to migrate towards

urban areas on account of very high unemployment in urban areas. On the other hand,

despite, existence of high rate of urban unemployment, rural mi!:,rration continues

towards urban areas because of large difference in incomes between the areas.

Therefore, it can be said that migration is inversely related to the urban unemployment rate

whereas, it is directly related to difference in incomes between rural and urban areas.

It is argued that Iran has a dual economy, like many of the Third World ~~ ~- . ~ . ------·---

countries, and so Todaro model is applicable in case of this country. On the other hand,

application of the model requires sufficient data regarding number of migrants from

rural areas to urban places, average real wages or incomes in rural and urban areas,

unemployment rate in urban areas and the cost of migration. Keeping in view the fact

that all the required data are not available in case of Iran, an attempt will be made to

consider the effects of rural and urban development on interprovincial migration by

using a simpler form ofTodaro m&iel. The exact form of the modified model shall be

evolved in the light of data availability. "'------ --- -

In addition to the above hypotheses, we shall investigate relationship between

9 MTodaro; Economic Development_i_!!_the_Third World, London, P~ 194, 1977.

!ntroduc/ ion 15

regional development on the one hand, and availability of natural resources on the

other. Regional and rural development policies will also be considered over the period

under economic development plans.

1.6.Research Methodology: For the purpose of this research descriptive and quantitative methods will be used. The

quantitative methods drown upon for this research can be categorized into the

following types:

1) Calculation of appropriate industrial, economic, socio-economic, urbanisation

and infrastructural indices subject to available data. For the purpose of this

study, two groups of indicators are being selected. The first group will consist

of indicators such as the share of industry sector in GNP, percentage _ ........... -.......... ..-. ...... -.--~-... ,,.. '' ..

employment in industrial activities, the share of manufacturing out of total

value added of the industry sector and their changes over time etc. Thereafter,

using statistical techniques such as Thiel's index, Gini co-efficient, Sopher's ~ . ...... . .

index, Co-efficient of variation and regression analysis, spatial pattern of - ·- ....

industrialization and its changes among the provinces of the country during the

period under consideration shall be analysed. The second group consists of

indicators which will be used to construct composite indices like industrial

indicators, infrastructural and urbanization indicators.

2) Construction of composite indices by using the method of First Principal

Component analysis, which is a useful statistical method in the present context.

Introduction 16

Moreover, in order to work out the inlluence of industrialization upon the

level of rural-urban and regional disparities the method of rebrression analysis shall be

used in the fonn of following categories of models:

i) The degree of industrialization in tenns of appropriate indicators, at national level,

will be selected as independent variable and rural-urban disparities indicator shall be·

considered as dependent variable with different time lag structures, subject to

available data for pre and post-revolution phases.

ii) The degree of industrialization in tenns of appropriate indicators is again regarded

as independent variable and regional disparities indicator will be introduced as

dependent variable with different time lag models, subject to available data, in pre

and post-revolution phases.

iii) In order to examine the impact of Islamic Revolution ( 1979) upon regional

disparities during post-revolution phase, we shall introduce a time dummy variable

and shall include it in the previous model.

iv) Finally, we shall undertake cross-sectional regression analyses at certain points of

time in the above manner across regions with a time lag as also without a time lag.

1. 7. Data Base : Required data have been collected from two main sources; international sources

such as United Nations Industrial Development Organization (UNIDO), World Bank

(WB), International Monetary Fund (IMF) etc., and domestic sources. There are a few

organizations which regularly issue economic, infrastructural, social, demographic and

/11/roJuction 17

educational data in Iran which are indicated below:

i) The Statistical Centre of Iran (SCI). This centre has to collect the statistics of

the country in areas as such as population, manpower, industry, ae,lficulture,

mining, education, housing, health and treatment, oil and gas, road,

transportation, communications, trade, money, price indices, national accounts,

state budget and household expenditure. This organization regularly publishes a

main annual data report named the Statistical Year Book of Iran. It also issues

several specialized reports. The most important duty of the centre is carrying

out of General Census of the Population and Housing of the country in each

decade. The last one was conducted in 1996.

ii) The Central Bank of Iran (CBI) which issues an annual report about the

economic conditions of the country at macro level. It also brings out a few

. other publications.

iii) The organizations of Plan and Budget (OPB) which releases an annual

Economic & Social Report. The annual budget of government and the plans of

economic, social and cultural advancement of the country are being prepared

by this organization.

iv) All ministries and organizations occasionally release their performance reports.

It should be noted that SCI is a unique organization which collects data and

issues them at provincial (regional) level in Iran. Therefore, we will collect much

of required data from its reports and publications (in Persian and English languages).

Introduction 18

We will, however, also make use of other data sources

1.8. Scheme of the Thesis __ . ..., This thesis consists of nine chapters. Thd fi .. ;~t·~·~; wi.ll be Introductio~. This

L.--------··- -- -····· .... ..

chapter briefly provides the background to the theme under investigation, discusses the

objectives of the thesis and introduce selected methods of analysis. The second chapter

will introduce a theoretical review of literature on industrialisation. We shall look into

some theories which have been presented by well-known schools/economists such as

the Neo-calssical School of thought, Big Push theory, Structuralism and Dependency

theories. In addition to this, we shall consider a few policies, which have been

undertaken by the Third World countries, like inward looking and outward looking

policies and infant industry policy.

In ~[~~we shall examine the situation of Iran from the point of view of

industrialization from commencement of twentieth century till the end of Shah era

( 1979). It should be noted that there was not any significant modem industry in the

\country before 1920. Nevertheless, we shall look through the period of 1900-1920 as

\ well. ~

Broadly, industrialization activities will be divided into four phases namely,

prenatal phase (1900-1920), the phase ofReza Shah's coup d'etat till implementation of

the First Seven-Year plan (1939- I 946), industrialization under five economic

development plans phase and post-revolution period (1979-1993). The last phase will

be the theme of the \[;w-fu chaptei We shall also consider industrial, policies which .... _ ... \

I .\· :r -~. ~-~f"' ,..,,.., ....

\ ~ "l" ~~ ·.~'·"~~( \~\~~<e~? . . ~·· ' - \ ' ..... .t'' ' ' \ .· ., ' .,

., .... u

\ <.\ \

Introduction 19

have been undertaken by Iran's state, over the period under consideration.

As pointed out, investigation of industrialization activities during the post-

. I . -------.) ,1 revolution phase will _be the theme of th~. fou'!h~P..t<;.[;· In addition to this, linkage .. ,

between industry and agriculture, dependency of industry sector to oil revenues of the

country and Kaldor hypothesis will be discussed in this chapter.

An attempt will be made in~ fifth- ~h~~~ to investigate the effects of 7'\'-.-.-...... ,_ __ .,...

\

industrialization on interprovincial divergence. Spatial pattern of industrialization

among the provinces and its probable changes are the areas of concern in this chapter.

For investigating this theme, we shall use disparity indices for ~~~~ s~~~~e i~dica~or.

It should be noted that in view of lack of data about per capita income (PCI) at

provincial level, we shall use Per Capita Expenditure (PCE) at province level.

Moreover, composite indices will be considered as substitute statistic in this regard. In

addition to this, the role of natural resources and infrastructural facilities in

concentration of industries among the provinces will also be considered in this chapter.

The experience of industrialized countries indicates that urbanization growth £ and industrialization were interlinked within these cotmtries. Our purpose, in ~~l

~~

chapter is to survey the historical experience of Iran in this respect. We shall seek to , r----

enquire whether urbanization growth and industrialization have taken place in the same

direction in Iran or not~ if no, what were effective factors influencing the pace of

urbanization in Iran? Further, interprovincial migration will be discussed in context of a

Todaro model, subject to available data.

fnlmduc/ion 20

A survey of rural-urban inequalities in the process of industrialization is the ( ..

matter of investigation in th~ :e~enth chapte/ For approaching this purpose, firstly, we '---

shall look through historical perspective of rural-urban differences and shall consider

factors which are responsible for widening inequality between them over time.

Thereafter, using appropriate indicators like per capita expenditure, literacy rate, postal

facilities per I 00,000 population, rural-urban disparities will be analysed. Moreover,

we shall construct composite indices at different points of time, subject to data

availability.

Undoubtedly, the decisions of policy-makers have a key role in respect of rural-

urban and regional development. They can follow sectoral efficiency policy

irrespective of its effects on various regions and rural areas within them or undertake a

policy to mitigate regional and rural-urban inequalities. Hence, investigation of

policies, which have been adopted by the state in Iran in this regard, is our aim in the

eighth chapter. This theme will be examined from inception of planning activities in the

country onwards. Relative preference of agricultural sector in comparison to industry

from the perspective of provision of government facilities will be considered as a

comer-stone of these policies.

A summary of research undertaken, main conclusions and suggestions will be

pointed out at the end in the last chapter of the thesis.